Feb 26 (Reuters) – A global shortage of gaming chips could last until the end of this year, an Nvidia (NVDA) executive has said, signaling more pain for the video game industry that is already buckling under weak sales due to slowing consumer demand.
Nvidia expects the supply constraints to hurt its gaming business in the current quarter and beyond even as the chip giant sees strong demand, Nvidia finance chief Colette Kress said on the company’s quarterly earnings call on Wednesday.
“As much as we would love to have more supply, we do believe for a couple quarters it is going to be very tight,” Kress said.
“If things improve by the end of the year, there is an opportunity to think about what that is from a year-over-year growth. But it’s still too early for us to know at this time.”
With the tech industry racing to build out artificial intelligence capacity, demand for memory chips has outstripped supply, causing a spike in prices and prompting manufacturers to prioritize components for higher-margin data center chips.
That has constrained supply for consumer electronics such as smartphones and personal computers, as well as gaming consoles. Nvidia chips are widely used in PC gaming as well as in the Nintendo Switch console, while Sony’s PlayStation and Microsoft’s Xbox consoles use AMD hardware.
Forecasts for the console market have been bleak. According to projections from tech industry research firm TrendForce in December, the console market is expected to see a 4.4% decline this year, compared with its earlier forecast of a 3.5% drop.
(Reporting by Deborah Sophia in Bengaluru; Editing by Maju Samuel)